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Citi analyst on U.S. equities: “It is rare of SPX to decouple from banks. Sharp selloffs in banks are usually coincident with sharp selloffs in overall equity markets, no doubt because banks are a good measure of underlying economic strength. The banking stress events of the last weeks are likely to have consequences, we stay underweight US equities. Early PMIs have been weak in the US with the Philly Fed index back at the lows and the Empire PMI also reversing recent gains. The SPX usually does not trade well into recessions and bottoms only well into it. The recent run to 4000 suggests that the market is pricing a soft landing, which is not our base case.”
